Weekly Forex Price Action Setups: June 23 - 28, 2013

Dropping over 3 cents since the FOMC announcement, the Euro has continued to sell off from the engulfing bar signal we discussed a few days ago. With the break and close below both 1.3182 (key level), and the daily 20ema, I’m now looking for sell signals only I’ll short on a pullback towards 1.3182 and the daily 20ema, targeting 1.3090 and 1.2975. Only a close back above 1.3250 this week would negate my bearish view.
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EUR/JPY
In an attempt at recovery last week, the EUR/JPY formed a pin bar signal off the daily 20ema which halted its progress. Although this is not at a stronger resistance area like the 130.70, I still think this is a workable signal as it offers a low risk setup by taking a pullback into the pin bar. Should this 20ema and pin bar hold, downside targets would be 126 and 125. Closing above 131.53 would likely mean a retest of the yearly highs around 133.
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Dow Jones Index
On Thursday’s Market Commentary, I talked about looking for sell signals on the U.S. index, with one of the levels being 14871. Price action went right up to the level on a weak pullback, and sold off right to the first 14685 target (~200pts) where savvy price action traders profited, so hopefully you did the same.

The index rallied to end the week, recovering most of the losses from Thursday. But the bearish pressure is on, and I think the uptrend has been heavily damaged, if not dismantled for the moment. I’ll look for deeper pullbacks towards 15000 to rejoin the bearish price action, and for a move down to the June lows and perhaps 14500.

Spot Silver
Silver has not had one daily close above the 20ema since February 7 this year. The downtrend broke new ground last week, taking out the $20 barrier. I suspect there will be a pullback setup to rejoin the trend, so I’ll look for bearish price action signals around 21.38 which was a key breakout level where the impulsive selling continued. Downside targets are 19.50, and 17.25, while stops would be just above 22.


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